Learning More About International Transaction Fees

When a U.S. credit card is used abroad, most of the major card companies charge a two to three percent fee to process foreign transactions.

Many credit card companies failed to clearly explain these international fees in their terms and conditions. Recently, a number of consumers were notified of a class action lawsuit settlement having to do with these fees. Now that the lawsuit has been settled, credit card companies are now required to state explicitly what foreign and international transaction charges will be on all credit card applications.

If you do not know how much your credit card company charges for international transactions, the customer service representative will inform you. Paying that extra three percent for every purchase can really cause the costs to add up quickly, but fortunately, there are some ways to avoid these charges.

The foreign currency rate you will receive from your bank will usually be much better than that of a foreign currency exchange vendor.

When a debit card is used as a credit card, there could be some risks involved even though ATM withdrawals are typically don’t charge for foreign transaction charges. To be more specific, a credit card gives you much better fraud protection than a debit card, so using one abroad to make purchases does carry risk.

If your credit card is used by an unscrupulous merchant to overcharge you or for some other type of fraud, the charges can easily be contested and your card account will be refunded. When a debit card is used fraudulently, it will make your bank account disappear and it will be very slow to reappear.

It seems that the best way for you to keep from paying international transaction fees, is through the use of the credit cards that charge no fees; these no fee credit cards can give you security without the added expense.

It is important to know how much you will be spending in your everyday living, but it is more important when you are on vacation, because a small fee is charged for every ATM transaction. Most people do not have a very precise idea of how much cash they may need to have on hand while traveling; it is difficult to withdraw the correct amount in one single transaction. Sometimes it is hard to find a cash machine in many countries, but you have to be careful to not withdraw too large of an amount at one time to protect yourself from being robbed.

Converting funds back to your local currency will present the need for fees to be paid in addition to the fees you paid to convert to the foreign currency.

There is a fee charged for the purchase of traveler’s checks and they are not accepted in some areas, however, they do offer a secure alternative to cash, because they can be replaced if lost or stolen.

If you are applying to get a credit card that will not charge you additional fees for foreign purchases, be sure you understand the terms and conditions of the credit card policy to know the card you will be getting is the one you thought it was. Examine the terms of the card before using it, to assure yourself that you can pay off the balance in a hurry, if the interest rate is high, so you won’t be paying additional fees in a different way.

Ally Cossgrove writes for the JSNet.org offering credit card comparisons with great offers including student credit cards or just visit to read more of Ally’s great articles!